BRITAIN’S oldest brewer, with 290 pubs, is set to hike the cost of a pint following Labour’s tax raid – leaving beer lovers gutted.
Shepherd Neame, which is more than 300 years old, says new tax and wage hikes set to kick in next month, will cost it a staggering £2.6 million a year.
The pub giant, which brews Spitfire and Bishops Finger, has warned punters they’ll have to fork out more as it battles soaring costs.
From April, employer National Insurance Contributions (NICs) are rising from 13.8% to 15% while the threshold at which businesses have to pay them is falling from £9,100 to £5,000.
The national minimum and national living wages are also rising later this year, piling further pressure on bosses.
The tax grab is meant to help fund the NHS, but furious pub bosses warn it’ll make it even pricier to keep staff, forcing them to push up drink prices.
Boss Jonathan Neame said: “The additional costs imposed on our sector are most unwelcome but the business model is flexible and we can adapt to the new circumstances.”
He also added the increase in labour costs has “undermined business and consumer confidence in the short term”, but remains “hopeful that the economy will return to a growth trajectory, with net disposable income growing and interest rates falling.”
[boxout headline=”What are employer National Insurance Contributions (NICs)?”]CONSUMER reporter Sam Walker tells you everything you need to know.
Employer National Insurance Contributions (NICs) are effectively a tax on businesses used to cover social security benefits like Universal Credit and the state pension.
NICs are also paid by workers and the self-employed.
According to the Institute for Fiscal Studies (IFS), NICs are the UK’s second-biggest tax, expected to bring in around £170billion this financial year.
Employers only pay NICs on workers’ salaries from a certain threshold. This is currently £9,100 but will drop to £5,000 from April 6.
Those of state pension age or older do not have to pay NICs, but employers with workers aged 66 or older have to pay NICs on their earnings.
But total beer volumes at Shepherd Neame fell 12.6% in the second half of 2024 compared with the same period the previous year, the company said.
Meanwhile, revenue fell slightly to £85 million, amid an “increase in pub sales and a decrease in sales from premium bottled ales”.
However, underlying profit rose nearly 10% to £4.2 million after a fall in inflation last year.
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It’s not just Shepherd Neame feeling the pinch – other brewing giants have already warned that the price of a pint is set to rise.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”Why are so many pubs and bars closing?” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”6352178578112″ video_ids=”” width=”640px”]Simon Dodd, chief executive of Young’s, earlier this year revealed a 20p hike on the price of a pint, in reaction to the Government’s Autumn Budget.
He said: “We’ll mitigate as much as we can of the NI contribution – we’ll do that through efficiency, we’ll do that through investing in our pubs.
“But there will be some price passed on to the consumer.”
All Bar One owner Mitchells & Butlers (M&B) told The Sun last year the price of its pints could rise by between 10p and 15p.
The group, which also owns Toby Carvery, said higher wage expenses were “by far the most significant increase” in its cost base following the Autumn Budget.
Greene King, which runs over 2,600 pubs, has already bumped up prices.
Likewise, Wetherspoons drinkers have seen an extra 15p added to their pints.
Shepherd Neame, which employs around 1,600 people, said despite making cost cuts, some price rises are “unavoidable” over the next 18 months.
And it comes at a tricky time – total beer sales for the firm fell by 12.6% in the second half of 2024, while revenue dipped to £85 million.
Despite this, the brewer still saw profits jump by nearly 10% to £4.2 million, helped by booming summer trade and a record-breaking Christmas period.
Neame said: “We had strong summer trade, but confidence evaporated before the Budget. Since then, things have picked up again.”
For now, though, beer lovers will have to dig even deeper into their pockets as yet another price hike looms.
PRICE OF PINT REACHES ALL TIME HIGH
The average cost for a pint down your local now costs an average of £5.08 across the UK.
A recent survey by The Morning Advertiser found that the average price of a pint is now 26p higher than the £4.82 reported by the Office for National Statistics in December.
Beer prices have been pushed up due to a perfect storm of rule changes, including increases to taxes on alcohol, packaging and employer costs.
The trade publication routinely examines pint prices across various regions of the country.
The most expensive region is still London, where a pint costs £6.16 on average, and the cheapest is Midlands at £4.47.